2018 Tax Bill Changes
Here is what you need to know as a home-owner or buyer:
#1: Property Tax Deduction
The original law allowed qualifying taxpayers to reduce their taxable income by the total amount of property taxes paid. Starting in 2018, individuals will be limited to a $10,000 deduction for the cost of state taxes, property taxes and sales taxes. So wave goodbye to those write-offs.
#2: Mortgage Interest Deduction (primary and second homes)
The mortgage interest deduction cap is reduced to $750,000, instead of $1 million.
#3: Home Equity Deduction
Prior to 2018, the tax law gave a deduction for interest paid on home equity debt “for reasons other than to buy, build, or substantially improve your home.”
The 2018 tax bill eliminates the deduction for interest paid on home equity debt.